Future’s not so bright, but we’ll buy shades

October 27th, 2008 at 06:37pm Annette LaCross

Published Oct. 20:

We haven’t even gotten past Halloween yet, and hopes for a season of economic holiday cheer are already fading.

The National Retail Federation is expecting a 2.2 percent rise in November and December sales. It’s the lowest growth since 2002.

That’s not great news for a sector used to logging 4.4 percent gains year over year.

But if I were a retailer, I’d be uncorking the champagne. A rise! After months of news about higher jobless rates, dismal housing stats, confusingly high oil prices, tanking home values and a financial crisis worthy of a Steven Spielberg drama, I’m surprised that shoppers aren’t heading for the hills in record numbers.

But as I’ve said, we are optimists at heart.

Well, we are consumers first and foremost — for the time being, at least. As I’ve also said, it’ll take a while for most of us to break the habit of easy credit and easy buying. And it looks like we aren’t necessarily shying away from buying for the holidays.

There’s at least one bright spot, according to NPD Group Inc., a market research firm. One you probably never expected.

Just one word: sunglasses.

“The younger market is all over them, and the bigger the logo, the better. They are the most sought-after item by young adults. Sunglasses will be this year’s handbag,” NPD’s chief industry analyst, Marshal Cohen, says.

I hate to think I missed a trend here, but what was last year’s handbag? Or was the handbag the thing that replaced … whatever the previous year’s Really Big Thing was?

I feel so out of touch. But NPD is so bullish on sunglasses, it’s calling it the “sleeper” category.

The projected success of another category makes more sense to me: televisions.

This is the last year for analog TV reception, and consumers probably will want to buy new digital sets and avoid all the nuttiness with converter boxes and so on.

Still, if you’re a retailer — or anyone who sells anything to anyone — be prepared to push hard for the upsell.

“For the first time I am predicting flat to declining sales for the holiday season,” Cohen says. “With consumers already saying they plan to spend less, stores with lean inventories, those inventories on sale as soon as they hit the floor, and tightening credit for businesses and consumers, where can growth come from?”

And credit card spending is expected to fall with the roiling financial markets. Banks are offering fewer cards and they’re not extending credit like they used to.

“Consumers will be keeping careful watch on their credit card spending this season,” Cohen says. “I think many will refrain from purchasing an indulgence or splurge gift, and for the first time in years may actually cut people from their shopping lists.”

And gift cards, those darlings of the retail market, may take a hit this year, too. With companies like Linens ‘N Things liquidating their stores, consumers are hesitant to buy stock in a company that may not be around in a year or so.

Only 38 percent of NPD’s survey respondents said they will buy a gift card this year, while nearly 50 percent said they bought one last year.

Speaking of holiday worries … if you’re hoping to snag a little temporary work at shopping malls and department stores, it will probably be harder to find. Another survey said the average number of seasonal workers each manager plans to hire for the holidays is 3.7 people, down by 33 percent from last year’s average of 5.6 workers.

Mount Morris loses again

Certainly residents of Mount Morris (population 3,013) and its once-vibrant publishing industry aren’t feeling any love as we head further into the fourth quarter of what has been a financially grim 2008.

The New York-based parent of Kable News Co. announced plans this month to move the vast majority of the work done in Mount Morris to the Sunshine State by 2010.

The announcement by Amrep Corp. means Ogle County will lose more than 425 jobs.

It’s the village’s third blow in two years. Last year, Quebecor World Inc., which has a massive printing plant with 700 workers, filed for Chapter 11 bankruptcy protection, and the privately owned Watt Publishing, which was started in Mount Morris in 1917, moved its headquarters and about 70 employees to Rockford.

It makes sense. The company is cutting costs by combining its operations in Colorado, Illinois and Florida. The Florida operation has the largest subscription base and number of employees.

But that’s cold comfort to workers facing the unemployment line.

And it’s none at all to the village, which will lose out on the revenue those 400 workers generated.

Like Alije Dauti, whose restaurant is right across the street and relies on those workers and their lunchtime appetites. With that one announcement, her status may have changed — from small-business owner to statistic — in one fell swoop.

Alex Gary spent the day in Mount Morris to find out what residents think of the news. Read his story on Page 12.

Entry Filed under: Uncategorized